Friedman doctrine
Encyclopedia
The Friedman Doctrine is an idea proposed by economic theorist Milton Friedman
, which states that a company's only responsibility is to increase its profits.
Friedman argued that a company should have no "social responsibility
" to the public or society because its only concern is to increase profits for itself and for its shareholders. He wrote about this concept in his book Capitalism and Freedom
. In it he states that when companies concern themselves with the community rather than focusing on profits, it leads to totalitarianism
.
In the book, Friedman writes: "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
The Friedman Doctrine is highly controversial. In left-wing
social activist Naomi Klein
's book The Shock Doctrine
, Klein criticizes the theory.
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
, which states that a company's only responsibility is to increase its profits.
Friedman argued that a company should have no "social responsibility
Social responsibility
Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the...
" to the public or society because its only concern is to increase profits for itself and for its shareholders. He wrote about this concept in his book Capitalism and Freedom
Capitalism and Freedom
Capitalism and Freedom is a book by Milton Friedman originally published in 1962 by the University of Chicago Press which discusses the role of economic capitalism in liberal society. It sold over 400,000 copies in the first 18 years and more than half a million since 1962. It has been translated...
. In it he states that when companies concern themselves with the community rather than focusing on profits, it leads to totalitarianism
Totalitarianism
Totalitarianism is a political system where the state recognizes no limits to its authority and strives to regulate every aspect of public and private life wherever feasible...
.
In the book, Friedman writes: "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
The Friedman Doctrine is highly controversial. In left-wing
Left-wing politics
In politics, Left, left-wing and leftist generally refer to support for social change to create a more egalitarian society...
social activist Naomi Klein
Naomi Klein
Naomi Klein is a Canadian author and social activist known for her political analyses and criticism of corporate globalization.-Family:...
's book The Shock Doctrine
The Shock Doctrine
The Shock Doctrine: The Rise of Disaster Capitalism is a 2007 book by Canadian author Naomi Klein, and is the basis of a 2009 documentary by the same name....
, Klein criticizes the theory.